Amazon’s tablet will be Android’s White Knight

Forrester analyst Sarah Rotman Epps has written a guest editorial that paints …

A new research report from Forrester predicts that Amazon will be Apple's chief rival in the tablet market. Although Amazon hasn't announced a tablet yet, Forrester expects to see the company deliver one this year—and potentially sell millions of units. Forrester's research mirrors our own take about how Amazon could disrupt the tablet landscape by delivering a low-cost alternative to the iPad.

Forrester analyst Sarah Rotman Epps, the principal author of Forrester's new report, shares her views below in a speculative guest editorial that paints a compelling picture of how Amazon could raise the bar for Android tablets. Following her editorial, you can read our response, which is based on some questions that Ryan Paul asked Epps in an interview conducted via telephone.

To talk about the "tablet market" today is a polite way of saying the "iPad market." Apple has sold 28.7 million iPads worldwide to date, while competitors' tablets are languishing unsold in the channel. (That is, until they cut the price to $99, as HP did recently for the TouchPad.) Today, Apple's lead in the tablet market looks invincible. But a year from now, this won't be the case, as the first true iPad competitor, the Amazon tablet, likely enters the market this fall. An Amazon tablet at a sub-$300 price point could sell 3 million to 5 million in Q4 alone if they have enough supply to meet demand—a big "if" for Amazon.

Of course, it's sensible to ask why Amazon would choose to launch a tablet when Amazon already sells its eBooks and eCommerce goods through Apple's iPad, iPhone, and other manufacturers' devices. And as HP's recent withdrawal from the tablet (and PC) market confirms, it's difficult and expensive to launch a consumer electronics device, and the risk of failure can be significant. But compared with Apple, and especially compared with other tablet competitors, Amazon will be uniquely able to compete and differentiate, across not just price, but also:

Content: Amazon sells a variety of digital content by subscription and download, including Android apps, eBooks, music, games, and video. In a move that goes beyond what Apple could offer, Amazon has also invested in acquiring its own custom content through Amazon Studios for film and Amazon's self-publishing platform for eBooks.

Cloud: Apple's iCloud will have more robust features than Amazon's Cloud Drive when it launches this fall, but Amazon's B2B cloud offerings and Web Services provides a hefty behind-the-scenes edge. Product strategists at Amazon have a unique opportunity to design a delivery platform for cloud-augmented Android apps that are highly differentiated from their competitors. This infrastructure, if exploited properly, could be a critical weapon in the tablet wars.

Commerce: Although Amazon doesn't publish its numbers on stored customer credit cards, it's likely the only credible competitor to Apple, which reports that iTunes has more than 200 million credit cards stored on file for seamless one-touch purchases of apps and content on the iPad. Already shopping is a popular activity on tablets—47 percent of tablet owners have researched and purchased a product via their tablet, and an additional 13 percent have shopped but not bought. As an eCommerce leader, Amazon could take "t-commerce" to the next level, integrating assets such as one-click purchasing and Amazon Prime subscription service into the tablet experience.

So if Amazon's tablet comes out of the gate raring to compete, what will it mean for product strategists across the rest of the tablet market? For Apple, it will be time to go on the defensive. Not only does Amazon have the potential to gain share quickly, but its willingness to sell hardware at a loss, as it did with the Kindle, makes Amazon a nasty competitor. Apple can't underestimate how hard it is to compete with Amazon in the hardware game—this has been made clear in the eReader space as Sony has neither been able to match Amazon on price, nor innovate its product as fast as it needs to in order to compete.

For Android OEMs, Amazon's tablet will be a "frenemy." There's potential for Amazon to not only launch its own hardware, but also to be a platform for other OEMs such as Acer, Lenovo, and Toshiba that don't yet have vastly differentiated offerings from other Android competitors. While Amazon's strength may not be hardware sophistication, Amazon-OEM partnerships could yield a variety of hardware choices for consumers, wider reach for Amazon, and a more compelling software and content play for OEMs.

And what about the app world? So far, product strategists across a wide range of industries have invested in iPad apps but have resisted developing Android tablet apps. As of yet, there are fewer than 300 apps for Google's Honeycomb, while Apple claims 100,000 custom-built iPad apps. But, if Amazon's Android-based tablet sells in the millions, Android will suddenly appear much more attractive to developers who have taken a wait-and-see approach.

While this all paints a positive outlook for Amazon's tablet, it's not going to be a walk in the park. There are weaknesses in Amazon's product strategy that could cause stumbling blocks. For instance, Apple's biggest strength, and Amazon's biggest weakness, is channel. Amazon has no brick-and-mortar stores, compared to Apple's soon to be 357 stores worldwide. Amazon lacks Apple's brand strength outside the US. And what about Google? Is this partnership an asset or a challenge? Amazon needs to differentiate its flavor of Android from all the rest, and that may come from emphasizing the Amazon experience over the Google one, as Barnes & Noble has done. But none of these challenges are insurmountable, and we expect that within a year "Amazon" will be synonymous with "Android" in the tablet market.

Sarah Rotman Epps is a Senior Analyst at Forrester Research serving consumer product strategy professionals Follow her on twitter @srepps.

Ars responds (by Ryan Paul)

I discussed Amazon's tablet prospects with Epps over the phone after I read the draft of her editorial. We talked about how Amazon will differentiate its tablet and what challenges the Internet retail giant will have to overcome in order to make the product successful.

Although an Amazon tablet is hotly anticipated by analysts and the press, it isn't actually a thing yet. Amazon hasn't gone on record with any specific tablet plans or a product roadmap. Speculation about the product's imminent arrival is drawn largely from credible rumors, whispers in the channel, Amazon's growing investment in Android-related technology, and a strong intuitive sense that a tablet product is the next logical step forward for Amazon's consumer electronics strategy.

Due to the highly speculative nature of Amazon tablet discussions, we don't really have a clear picture of what an Android-based Amazon tablet would look like. There are still a lot of open questions about form factor, screen type, software implementation, and other characteristics.

The early rumors suggest that Amazon will aim for a 9-inch screen. In our previous coverage, we suggested that a 7-inch screen might make more sense—it would lower the cost, increase portability, and save Amazon from having to make the tough choice that comes up at larger sizes between a movie-friendly or book-friendly screen ratio.

When I discussed the form factor issues with Epps, she cited a Forrester study which examined consumer screen size preferences. She explained that there is demand for both large and small tablets, but that consumers generally tend to favor the larger size and value additional screen space over additional portability. She pointed out that it's difficult to draw conclusions from the market today because the iPad is currently the only successful large tablet and the Nook Color is currently the only successful small tablet—meaning that the direction that Amazon goes for the device's size could end up setting a precedent.

We also talked about what kind of technology Amazon might use for the screen. As I have previously written, I think that Amazon should adopt a dual-mode Pixel Qi screen or something of that nature—it would be a huge win for differentiation and would make a hypothetical Amazon tablet a lot more interesting to consumers and a better fit for the Kindle brand.

A key issue, however, is cost. Considering the cost constraints of the OLPC project for which the Pixel Qi screen was originally developed, I suspect that Amazon could squeeze one into its tablet without having to boost the price, but that's not really clear yet. Epps says that Amazon can differentiate its product in software and services and that the company's chief focus for hardware design will be keeping the cost as low as possible. Leaving out the camera, for example, is one decision that Amazon might make in order to hit the target price point.

This line of reasoning leads to an obvious question: if Amazon delivers its tablet at a sub-$300 price, how does that impact its competitive posture versus the iPad? I've written in the past that I think it would put the Amazon tablet squarely in a separate market segment—with only a modest impact on iPad sales. Epps agreed, but she doesn't think that a lower price will allow an Amazon tablet to overtake the iPad in popularity. She imagines Amazon's offering becoming the dominant Android tablet and following the iPad in position number two for the broader tablet market.

Another issue we talked about is how an Amazon tablet would impact the broader Android ecosystem. She says that Honeycomb, in its current form, is a nonstarter and that Amazon will have to radically improve the user experience offered by the software in order to make a desirable product.

The success of a unique Amazon tablet flavor would marginalize the conventional Android platform on tablets, especially if Amazon starts licensing its custom version of the operating system to other hardware vendors. Despite the challenges posed by such fragmentation, Epps thinks that any effort Amazon makes to popularize Android on tablets would still be beneficial to Google and the broader Android ecosystem due to the network effects.

I think one of the biggest challenges that Amazon will have to overcome in order to make a successful tablet is its frayed relationship with third-party application developers. Although Amazon's Appstore offers a pretty good end-user experience, developers have been a lot less impressed. Amazon's poor handling of promotions and inconsistent pricing model have rankled a few prominent developers. Eccentric policies and lengthy application review times also appear to be common complaints. These problems, coupled with the lack of global reach, could make Amazon's store look unappealing to third-party developers.

When I raised these issues, Epps countered by pointing out that developers have flocked to iOS in order to reach the iPad's audience despite the modest indignities imposed by Apple's own convoluted review process.

Forrester's research has determined that the biggest factor that developers consider when they decide whether to support a platform is whether it has an audience or the potential to attract an audience. On that basis, she thinks it's likely that Amazon will be able to cultivate developer mindshare if it can first build an audience for the tablet. In the long run, the fact that budget tablet buyers are likely to be less affluent than iPad buyers might prove to be a more relevant deterrent than Amazon's Appstore policy problems.

We normally wouldn't devote so many words to a product that doesn't exist yet, but reader interest in the Amazon tablet speculation has been significant. I fully agree with Epps that an Android-based Amazon tablet would be a game changer for Android and the tablet market. What do you think?

133 Reader Comments

The Amazon tablet will succeed because it won't be app-centric like the iPad, but content-centric like the Kindle because that's what they're best at. Expect to see well done apps in web browsing, email, Kindle, MP3 store, media player, and the Amazon App Store for Android will be there too.

But at $249-$299, it'll be a gateway drug for Amazon content, plain and simple. And you really only need iPad 1-class hardware to pull it off too.

The Amazon tablet will succeed because it won't be app-centric like the iPad, but content-centric like the Kindle because that's what they're best at. Expect to see well done apps in web browsing, email, Kindle, MP3 store, media player, and the Amazon App Store for Android will be there too.

But at $249-$299, it'll be a gateway drug for Amazon content, plain and simple. And you really only need iPad 1-class hardware to pull it off too.

So you think the Amazon tablet will be a success because it will be content centric, but then list a a bunch of apps to support that theory?

Doubtful. I am an Amazon Prime customer and buy all kinds of stuff, mostly books, from them. Tried the Kindle and the iPad Kindle app and was not impressed.

Their streaming video service is a mess and is so poorly organized as to be shameful. Their music isn't much better. The Kindle is a single purpose clunker. Amazon figured out the delivery chain of physical objects really, really well but they haven't figured out what iTunes/iOS/App store do as of yet.My guess is that it may sell better than other Android tablets but will be far behind the iPad.

The Amazon tablet will succeed because it won't be app-centric like the iPad, but content-centric like the Kindle because that's what they're best at. Expect to see well done apps in web browsing, email, Kindle, MP3 store, media player, and the Amazon App Store for Android will be there too.

I am not even sure what that means...

You say it will be content centric, and not app-centric, and go ahead to list a bunch of apps that the iPad already has versions of. (And good, if not better alternatives to).

I think Amazon's big edge is the ability to sell HW at a loss, but will they really go down that road? Is there enough money in the digital content selling business to begin with?

Will be an interesting few years ahead, esp. if Amazon enters the tablet market (which they likely will, IMO).

Perhaps the author should wait and see what exactly the Amazon tablet will feature before declaring that it will be a success or iPad killer?

Agree!Right now it's all speculations, after all it's the foundation of the hardware that makes things possible. And the hardware is not known at this point. Content delivery or not. If the hardware cant do it, whats the point ? sure SoC becoming more and more cheaper, and most of us know that the screen is the most expensive part, and not the SoC or the battery.

Then there is the balancing act between "future-proof vs how soon will it become obsolete" on the hardware side to keep up with things. AFAIK nowadays the cycle is 12-18 months - that's a lot of time in apps/hardware/OS development

I own the ASUS Transformer, and I've to say I'm positively impressed with its specs compared to its price tag. 10 inches is a bit big to handle for continuous books reading, but my kids sure love it when the ASUS transformer streams live from Google Videos/Netflix through my ATRIX' smartphones 3G OTA internet connectivity in my minivan (piping sound via standard bluetooth-FM-transmitter into the minivan's stereo system)

I'm pretty sure I've read a variation of this article about the last alleged iPad killer. Why not wait until there is a shipping product before calling the race? Tech media and analysts are starting to look foolish declaring each new tablet a winner before it fails.

I'm pretty sure I've read a variation of this article about the last alleged iPad killer. Why not wait until there is a shipping product before calling the race? Tech media and analysts are starting to look foolish declaring each new tablet a winner before it fails.

I think no one is calling this an iPad killer (at least not in the article I read). Even Epps says that even IF it is successful, it will probably be no. 2 behind the iPad.

I think both the Ars response, and Epps original editorial seem to present the great opportunity Amazon has to become the #1 Android tablet in the near future.

Well, my congratulations to Epps for getting a plug for her other piece, but I confess that what I read here only made me wish I could get a day job as a technology analyst. There was nothing new there: or, maybe analysts really aren't analysts so much as summarizers for people who don't keep up with the news?

I agree with halse. I have been an Amazon Prime subscriber since close to the beginning of the service, and I have been delighted with it. Both my wife and I have purchased video content as well. As owners of Macs and iPads, we still prefer Netflix overall, since it is device independent, in a way that Amazon's video is not. (Unlike halse, we have been very satisfied with the device independence of Kindle content: we're read books on our Macs, on our iPads, and on our iPhones -- that I can't open Kindle content in GoodReader and save my own annotations is, however, a bummer.)

Not only is Amazon's video delivery a mess, but as halse noted, their interface is as close to a disaster as one can imagine. Your video library remembers where you are in a given episode, but it doesn't remember what episode you were watching. Oof.

EDIT: Lion's new autocorrect turned halse's name first into "false" and later into "halves." Double off.

But at $249-$299, it'll be a gateway drug for Amazon content, plain and simple. And you really only need iPad 1-class hardware to pull it off too.

Price is going to be the main thing. HP showed you can create a whole bunch of buzz if the price is right, and I think that's the only way anyone can take on the ipad. The nook color's been doing a decent job as the budget tablet, but amazon could really make an impact.

Typical crap from these so-called expert "analysts." Just put out some BS headline to grab attention for yourself and your firm. Declaring that a year from now an Amazon tablet will be a significant competitor to the iPad, before it's even been announced or released? And knowing nothing about Amazon's ability to produce hardware other than Kindles? There is no logic to an argument like that today. Interesting also how she says Honeycomb's user experience is a nonstarter. Really, is she a user experience expert? Does she know for certain that Honeycomb's user experience is the reason Android tablets are not selling so hot and not a multitude of other reasons? The line about budget tablet buyers likely being less affluent than iPad buyers is also way off the mark and insulting. There are plenty of individuals that probably don't have the cash to buy things like iPads but do anyway because they like to blow money on toys, or people who could easily afford an iPad but choose to buy something cheaper because they personally don't feel it's worth $500. A lot of things wrong with this assessment overall.

Um, you can buy Kindles now in both Target and Walmart. Surely that gives them enough brick and mortar locations to compete with 357 Apple Stores. To my knowledge there isn't an Apple store anywhere in my state, at least not one within a two hour driving distance, that I'm sure of, but there are a couple of Targets near me and a half dozen Walmarts. If Amazon markets a tablet, I'm sure I'll be able to pick one up locally if I choose. Although we've bought two Kindles in my house directly from Amazon, so I'm not sure why anyone comfortable with ordering books from Amazon would hesitate to order a tablet from them.

They may have other things standing in their way, but I seriously doubt brick and mortar locations is a significant one.

I'd never buy anything less than a 10" or so tablet, because that's the minimum size if you want to display PDFs or comics without having to zoom. To be useful to me, a tablet needs to be about "piece of paper" size. When I need a smaller form factor, I have my phone. These "in-between" size tablets seem to be responding to people's speculation about what they want (as opposed to what they find useful in practice) and/or differentiation for its own sake.

a 14" screen (8.5x11" or A4 in Europe) @ a decent resolution will be the killer. Being 1:1 with a physical piece of paper, and incorporating a scanner function will allow a device to conume documents and show them as WYSIWYG will allow people to trust these more.

If you have to zoom to read, you've failed. If you can't obsolete paper (by scanning and displaying) you'll not get the game changer that everyone is waiting for.

I'd like to see an Amazon tablet that is tailored to delivering Amazon's content, rather than trying to compete with Apple directly. Amazon already has a reasonable combined market share in the sale of electronic media (books, music, TV, movies, magazines, games) and their tablet should be primarily designed to deliver that content. It should be "the Amazon experience" in the same way that Nexus devices are "the Google experience".

If offered at the right price point, Amazon will sell a ton of these in North America and Europe. And once everyone has one, third-party developers will flock to it in the way they have to the iPad. Unlike the Apple device, however, I do not think it is necessary for Amazon to try to build their tablet to replicate many of the features already found on smartphones. I agree that leaving off some of these features, like the camera, can help bring that initial cost down without making the device less attractive.

Isn't it interesting how every NEXT Android tablet is always going to be "The One To Beat the iPad"? These bizarro articles full of wishful thinking get really tiresome. When a product finally shows us something -- and shows that the public CARES about what you're hoping and praying they'll care about -- THEN talk about it. Until then, all of these articles come across as pathetic whining from Android fans desperate for a savior for Android tablet hopes.

The assumption here is that an Amazon Tablet would be even playing in the same market as the iPad, or am I misunderstanding it? Who says that Amazon will even compete against it vs. just offer a "specialized" media consumption device.

Amazon doesn’t have a real reason to give a shit about the Android ecosystem, they give a shit about selling books, music, videos, etc. and providing a good user experience (a la Kindle) for people buying from their online store.

If they manage to craete a solid device, they could very well simply establish themselves as a top tier Android Tablet maker, but at the same time push Android out of the "apps tablets" catergory even more. If they price it right, people _will_ buy their tablet, but see it more as a Kindle 2000 than anything iPad-like.

Whatever it is, reading books on it will be job #1. Because of that it must:- Stick to pretty much the current Kindle form factor and weight.- Have a large enough bezel that you can hold the thing without activating the touch screen.- Have large hardware buttons for page turning.

I lost my Kindle, and use an iPad as a replacement (waiting for the next gen kindle to truly replace it). The iPad is too big, it's way too heavy, I am constantly changing pages with stray touches, and I hate having to let go of the thing or move my fingers to change pages. These are things that the Kindle gets right.

As for the screen - as long as battery life is there, I could give up the e-ink. The iPad has actually convinced me that an LCD is just fine for reading. I do a lot more reading in bed than I do in broad daylight. I think a dual mode screen would be a bit of a gimmicky and expensive kludge. So gimmee 10-12 hours of reading a charge and I'll be ok with an LCD.

I've thought from day one that tablets have no real place in my life - the inherent form factor just imposes too many limitations. There are very few scenarios where even the best tablets (e.g. iPad, Xoom, Galaxy Tab) are the better choice than a smartphone or a laptop. But then HP sells a decent tablet with solid hardware for $99 dollars and all of a sudden I realize that I don't mind paying $99 for those very limited scenarios. So the question for me is no longer "do I need/want a tablet?" The question is now, "how much am I willing to pay for a tablet?"

I know it may be a bit unrealistic, but I think $300 is still too much. Under $250 and it will be under serious consideration. Under $150 and I'll pre-order the thing based on brand trust alone. These are my personal opinions.

The assumption here is that an Amazon Tablet would be even playing in the same market as the iPad, or am I misunderstanding it? Who says that Amazon will even compete against it vs. just offer a "specialized" media consumption device.

Amazon doesn’t have a real reason to give a shit about the Android ecosystem, they give a shit about selling books, music, videos, etc. and providing a good user experience (a la Kindle) for people buying from their online store.

If they manage to craete a solid device, they could very well simply establish themselves as a top tier Android Tablet maker, but at the same time push Android out of the "apps tablets" catergory even more. If they price it right, people _will_ buy their tablet, but see it more as a Kindle 2000 than anything iPad-like.

I agree that we shouldn't assume it will be in direct competition with the iPad, but I still think that is the most likely outcome. If the Amazon tablet let's you check email, surf the internet, and play movies, that's all a consumer needs to label it "iPad-like." It is my unscientific opinion that those three things are what the majority of people with iPads use them for.

But again, nobody actually knows what the speculated Amazon tablet will be capable of.

Here's the problem with making the Amazon Android tablet a loss leader:

It will attract the eBook buying segment but because it is such a great bargain, it will also attract the stingiest segment, those folks who will not buy a lot of apps, much less eBooks. So Amazon is running the risk of selling millions of tablets at a loss to people who will never buy enough stuff from Amazon to recoup the initial loss. I don't think that in anyway resembles a sustainable business strategy.

This wasn't a problem with current Kindle because its functions were narrowly proscribed to mostly eBook reading so pretty much all Kindle buyers were eBook buyers as well. But if they expand the functions to the range of normal tablet computing, now they will get customers who will be attracted by a single attribute: Cheap. These customers are not famous for their app (and eBook) purchases.

Tried the Kindle and the iPad Kindle app and was not impressed. The Kindle is a single purpose clunker

Except you're just a single person with an opinion, but the fact that Kindles have been selling like hotcakes stands against you. I have to admit, Amazon hit a home run with the Kindle. The device isn't perfect, but it almost is. So like many have already mentioned, if Amazon tailors the new devices more towards consumption of the services Amazon already provides, instead of trying to compete with the iPad, Amazon will be successful.

Is there any indication that Pixel Qi can deliver a screen with the specifications Amazon would need? In any kind of volume?

Their current best offering is a 10.1" 1024x600 panel, hardly worthy of a late 2011 or later product.

They've been teasing a new 10.1" panel with slightly increased resolution (1280x800), but it's still listed as "in development" on their site and there's no indication of when it might be production ready.

Then there's the issue of brightness, which according to reviews doesn't match good lcd screens. That's going to be a problem in a "sales situation" (i.e. optimal lighting conditions), where competing products with traditional LCD screens could look a lot better.

My dad had a saying that fits nicely with all this speculation about a tablet that hasn't even been announced: 'If "ifs" and "buts" were candy and nuts, everyday would be Christmas'. The web is becoming more and more about speculation, and less and less about solid facts, and unfortunately, the Technology side is the worst offender.

In the studies I have seen on the usability of the Kindle in an academic setting, the Kindle is dubbed a great reading device, but not a great studying device. I think that the main thing needed to shift this is to add to the Kindle the ability to take hand-written notes, including, potentially, lots of margin space for annotation. Do this and make college text books available and you'll have a huge market instantly. When I was in college, if I had had a device like that, plus a decent scientific/graphing calculator Aapp, it's all I would have needed to carry most of the time.

From the limited research I have done about handwriting on the iPad, it appears that the digitizer's resolution is too low to write neatly on the screen. Make this small adjustment and your Kindle would be a much less limited device. (Then add the ability to attach a USB or bluetooth keyboard and many college students wouldn't need an additional laptop.) They should stick with Apple's model of keeping the UI stylus-independent but make handwriting convenient, usable and a standard feature to encourage its availability when handwriting really is the best interface.

Since the hardware is still vaporware, is it possible the OS could be a tablet version of WIndows 8 instead of Android? That'd get past any Google/Amazon friction (yeah, adds MS friction) and possibly gets a more powerful tablet capability (less iPad, more tablet PC). I suppose it depends on the evolution of Android OS but they're not knocking it out of the part right now (for tablets, Android phones seem competitive as-is).

Why does Amazon have to use Android? Doesn't WebOS offer Amazon an opportunity to be different with a platform already fully functional but lacking only mindshare. Amazon can easily develop that mindshare with its established market, its credibility and renowned customer service. And if it owns WebOS, it doesn't have to live within the narrow confines of Android's restrictive open-sourceness, much less the prospect of having to compete with the Google-owned Motorola Mobility.

Of course, HP would have to sell. But methinks that HP is doing a "Coke Classic." Discontinuing a product to test the market's love for its product, and if it finds the test positive, proclaiming that due to strong public demand, it will be continuing WebOS.

The best of both world scenario would be that HP would do a joint venture with Amazon, and have Amazon gain the exclusive rights to WebOS for a limited number of years - to develop the market for WebOS without incurring any manufacturing and marketing costs. And Amazon would go on to seed the market with WebOS tablets, and give the market a terrific experience. It should be a foregone conclusion that when Apple sues Amazon, Amazon would have hit it big with WebOS.

I don't think the Android optimism is warranted. Amazon wants to control the experience and maximize their profit - they are an etailer, not a gadget maker at heart. That means a nook color competitor, not a subsidized standard Android tablet.

Bezos is a very smart guy, and he isn't going to tackle Apple head-on because that is how you get crushed. We saw this with Kindle (free 3G), with video on demand, with their affiliate service. I could go on. I think it's quite likely to be a limited device that plays to Amazon's strengths and defends their ereader business with support for videos and music.

a 14" screen (8.5x11" or A4 in Europe) @ a decent resolution will be the killer. Being 1:1 with a physical piece of paper, and incorporating a scanner function will allow a device to conume documents and show them as WYSIWYG will allow people to trust these more.

<b>If you have to zoom to read, you've failed.</b>

The necessity to zoom has nothing to do with the size of a tablet. Unless your tablet is the size of a 19 inch 4:3 monitor you will invariably navigate to site's that require you to zoom as they were designed with the aforementioned dimensions as a baseline. You can mitigate this with smart text reflowing (like Android's default browser) but if you were relying on reflowing text then you'd have no need for a 14 inch screen.

Like all analyst reports, it's a combination of "well, duh" common information and wild-ass guessing.

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As of yet, there are fewer than 300 apps for Google's Honeycomb, while Apple claims 100,000 custom-built iPad apps.

That's a misleading number, since the majority of Android apps scale to run on a tablet just fine (not zoom, but scale, like Windows apps), unlike running iPhone apps on the iPad. A version of an app that's designed for the bigger screen can certainly use the space better in some cases, but for a lot of applications it's just not necessary. The trend is also for Android apps to just do an update to support the higher resolutions rather than having a tablet specific version. That's a lot more customer friendly than forcing you to buy a new version when the developer just played around in the form designer for an hour.

Quote:

I would love to see it happen. But one thing is been missing in this article. Google can revoke licensing. Will Amazon take that risk? Even with all the contracts signed etc etc...

It's unlikely that a Kindle tablet will be a Google experience device, which means Google would have no say. The smart money is that Amazon is holding off for the Ice Cream source drop, and they will release in time for the holidays, with a pure Amazon device. I also don't see them really competing against the iPad in anything but a very oblique manner. Their overriding goal will be the same as the Kindle, to sell ebooks, with selling Android apps a far second.